Courts will not interfere with tender conditions absent arbitrariness, discrimination, mala fides, or bias.

The petitioner, a sole proprietorship, challenged Clauses 2, 9(viii) and 13 of the Hazaribag Central Jail’s e-tender for the fourth quarter of 2026–27, and corresponding provisions in the model tender.

The clauses required a consolidated bid for all listed goods, imposed an annual-turnover eligibility requirement of ₹43,37,000, and required bids for the food and grocery items.

The petitioner contended that these conditions departed from earlier tenders, which permitted item-wise bidding, and were arbitrary and inconsistent with legitimate expectations.

It sought to have the clauses quashed and the tender modified to permit item-wise or partial bids, with corresponding calculations of earnest money deposit and turnover eligibility.

The State opposed the challenge, relying on the limited scope of judicial review and the tender’s stated rationale for the changes.

1. Whether Clauses 2 and 13, which changed the bidding requirements from item-wise bidding in earlier tenders to a consolidated bid for the fourth quarter, were arbitrary or violated the doctrine of legitimate expectations.

2. Whether the annual-turnover eligibility requirement of ₹43,37,000 under Clause 9(viii) was arbitrary or unreasonable.

The Court applied the principles governing judicial review of tender conditions.

Under Tata Cellular v. Union of India, (1994) 6 SCC 651, tender decisions generally lie within the contracting authority’s domain, and the State must have freedom of contract.

Directorate of Education v. Educomp Datamatics Ltd., (2004) 4 SCC 19, Michigan Rubber (India) Ltd. v. State of Karnataka, (2012) 8 SCC 216, and Airport Authority of India v. Centre for Aviation Policy, Safety & Research, 2022 SCC OnLine SC 1334, establish that courts ordinarily will not interfere with tender terms or eligibility criteria unless they are arbitrary, discriminatory, mala fide, or biased.

Maa Binda Express Carrier v. North-East Frontier Railway, (2014) 3 SCC 760, similarly limits review unless tender conditions are tailored to favour a tenderer or class of tenderers.

In Uflex Ltd. v. Government of Tamil Nadu, (2022) 1 SCC 165, the Supreme Court held that courts should not determine what turnover qualification the authority should prescribe.

The Court also recognised that prior tender practices do not prevent the State from changing conditions in light of experience.

The Court found no basis to second-guess the State’s commercial decision to require a consolidated bid for the fourth quarter, despite item-wise bidding in earlier tenders.

Clause 31 explained that some bidders had offered very low quotations to secure contracts and subsequently failed to maintain the required quality; the Court considered this rationale reasonable and accepted the State’s authority to revise tender conditions based on experience.

The petitioner’s reliance on prior tender practices and legitimate expectations did not establish arbitrariness.

As to Clause 9(viii), the Court held that the fact that the petitioner or other contractors might not meet the turnover threshold did not, by itself, make the requirement arbitrary or unreasonable.

It dismissed the petition without an order as to costs.